The former finance director of Soka University of America has been indicted on charges he embezzled $1.7 million from the private university over the course of seven years, according to a federal indictment unsealed Friday.
Kiyoshi Hatanaka, 52, of Aliso Viejo had worked for a Big Seven accounting firm before coming to be Soka's finance director in 1990, a university spokeswoman said.
He left his job in January 2006, spokeswoman Wendy Harder said, after allegations arose that he had created sham university accounts at a Los Angeles bank, moved money into the accounts, and then cashed $10,000 checks from them.
Hatanaka could not be reached for comment Friday afternoon. His public defender, Chase Scolnick, did not immediately return calls.
Hatanaka came with Soka when it moved from Calabasas to open a 103-acre hilltop campus in Aliso Viejo. The university is affiliated with the largest Buddhist sect in Japan, but attracts students from the U.S. and around the world.
Assistant U.S. Attorney Lawrence Kole said evidence indicated Hatanaka gambled large sums of money during that period at casinos in Temecula and Las Vegas.
Hatanaka is scheduled to be arraigned in U.S. District Court in Santa Ana on Jan. 2, and could face trial in February, Kole said. He was indicted on eight counts of embezzlement and eight counts of money laundering; each count carries a maximum sentence of 10 years.
Kole said the bank became suspicious of irregularities and contacted officials at Soka, which then contacted federal authorities.
Soka's Harder said the bank expressed concern about transfers that were not approved by multiple people.
She said the university hired a new chief financial officer in 2005, and put Hatanaka in charge of endowment accounts.
Among the overhauls created by the new financial officer was a procedure requiring multiple signatures and approvals on bank transfers, Harder said.
Hatanaka is suspected of taking interest money out of endowment accounts, then moving money around in a way that made it less likely to be detected by university auditors, Harder said. "We're working now to recover the money," Harder said. "We did recover about a million dollars of the loss through insurance."
